{"id":355,"date":"2020-03-24T04:51:35","date_gmt":"2020-03-24T04:51:35","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/chapter\/glossary-production\/"},"modified":"2023-05-22T19:21:02","modified_gmt":"2023-05-22T19:21:02","slug":"glossary-production","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/chapter\/glossary-production\/","title":{"raw":"Glossary: Production","rendered":"Glossary: Production"},"content":{"raw":"
\n
<\/div>\n
accounting profit<\/dt>
total revenues minus explicit costs, including depreciation<\/dd>
average profit<\/dt>
profit divided by the quantity of output produced; profit margin<\/dd>
average total cost<\/dt>
total cost divided by the quantity of output<\/dd>
average variable cost<\/dt>
variable cost divided by the quantity of output<\/dd>
constant returns to scale<\/dt>
expanding all inputs proportionately does not change the average cost of production<\/dd>
diseconomies of scale<\/dt>
the long-run average cost of producing each individual unit increases as total output increases<\/dd>
economic profit<\/dt>
total revenues minus total costs (explicit plus implicit costs)<\/dd>
explicit costs<\/dt>
out-of-pocket costs for a firm, for example, payments for wages and salaries, rent, or materials<\/dd>
firm<\/dt>
an organization that combines inputs of labor, capital, land, and raw or finished component materials to produce outputs.<\/dd>
fixed cost<\/dt>
expenditure that must be made before production starts and that does not change regardless of the level of production<\/dd>
implicit costs<\/dt>
opportunity cost of resources already owned by the firm and used in business, for example, expanding a factory onto land already owned<\/dd>
long-run average cost (LRAC) curve<\/dt>
shows the lowest possible average cost of production, allowing all the inputs to production to vary so that the firm is choosing its production technology<\/dd>
marginal cost<\/dt>
the additional cost of producing one more unit<\/dd>
private enterprise<\/dt>
the ownership of businesses by private individuals<\/dd>
production technologies<\/dt>
alternative methods of combining inputs to produce output<\/dd>
production<\/dt>
the process of combining inputs to produce outputs, ideally of a value greater than the value of the inputs<\/dd>
revenue<\/dt>
income from selling a firm\u2019s product; defined as price times quantity sold<\/dd>
short-run average cost (SRAC) curve<\/dt>
the average total cost curve in the short term; shows the total of the average fixed costs and the average variable costs<\/dd>
total cost<\/dt>
the sum of fixed and variable costs of production<\/dd>
variable cost<\/dt>
cost of production that increases with the quantity produced<\/dd><\/dl><\/div>\n
<\/div>","rendered":"
\n
<\/div>\n
\n
accounting profit<\/dt>\n
total revenues minus explicit costs, including depreciation<\/dd>\n
average profit<\/dt>\n
profit divided by the quantity of output produced; profit margin<\/dd>\n
average total cost<\/dt>\n
total cost divided by the quantity of output<\/dd>\n
average variable cost<\/dt>\n
variable cost divided by the quantity of output<\/dd>\n
constant returns to scale<\/dt>\n
expanding all inputs proportionately does not change the average cost of production<\/dd>\n
diseconomies of scale<\/dt>\n
the long-run average cost of producing each individual unit increases as total output increases<\/dd>\n
economic profit<\/dt>\n
total revenues minus total costs (explicit plus implicit costs)<\/dd>\n
explicit costs<\/dt>\n
out-of-pocket costs for a firm, for example, payments for wages and salaries, rent, or materials<\/dd>\n
firm<\/dt>\n
an organization that combines inputs of labor, capital, land, and raw or finished component materials to produce outputs.<\/dd>\n
fixed cost<\/dt>\n
expenditure that must be made before production starts and that does not change regardless of the level of production<\/dd>\n
implicit costs<\/dt>\n
opportunity cost of resources already owned by the firm and used in business, for example, expanding a factory onto land already owned<\/dd>\n
long-run average cost (LRAC) curve<\/dt>\n
shows the lowest possible average cost of production, allowing all the inputs to production to vary so that the firm is choosing its production technology<\/dd>\n
marginal cost<\/dt>\n
the additional cost of producing one more unit<\/dd>\n
private enterprise<\/dt>\n
the ownership of businesses by private individuals<\/dd>\n
production technologies<\/dt>\n
alternative methods of combining inputs to produce output<\/dd>\n
production<\/dt>\n
the process of combining inputs to produce outputs, ideally of a value greater than the value of the inputs<\/dd>\n
revenue<\/dt>\n
income from selling a firm\u2019s product; defined as price times quantity sold<\/dd>\n
short-run average cost (SRAC) curve<\/dt>\n
the average total cost curve in the short term; shows the total of the average fixed costs and the average variable costs<\/dd>\n
total cost<\/dt>\n
the sum of fixed and variable costs of production<\/dd>\n
variable cost<\/dt>\n
cost of production that increases with the quantity produced<\/dd>\n<\/dl>\n<\/div>\n
<\/div>\n","protected":false},"author":32,"menu_order":21,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-355","chapter","type-chapter","status-publish","hentry"],"part":314,"_links":{"self":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/355","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/users\/32"}],"version-history":[{"count":1,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/355\/revisions"}],"predecessor-version":[{"id":356,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/355\/revisions\/356"}],"part":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/parts\/314"}],"metadata":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/355\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/media?parent=355"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapter-type?post=355"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/contributor?post=355"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/license?post=355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}